Ag Appropriations Conference Completed
After two weeks of delay as authorizers wrestled with
how to cut $3 billion out of FY2005 spending, appropriators completed
conference
committee action on FY2006 Agriculture and Food & Drug Administration
spending. This, despite budget juggling during reconciliation in which
some of
this
year’s
spending was technically moved to the next fiscal year to avoid the
budget axe.
The House passed the bill, H.R. 2744, this morning, by a vote of 318-63.
The Senate is expected to take up the conference report shortly.
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Country-of-Origin Labeling
In what's become almost
an annual appropriations event, conferees once again took up the
issue of country-of-origin
labeling (COOL) and
whether the labeling scheme should be mandatory or voluntary for
fresh meat, fruits and vegetables. Sen. Conrad Burns (R-MT) led the
Senate
charge to return COOL, but was again unsuccessful as conferees agreed
to delay mandatory COOL for two years. This deadline coincides with
the rewrite of the Farm Bill, the legislation which originally authorized
COOL.
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Animal Welfare
Also dumped or significantly modified during conference
were several animal rights-supported amendments. Removed from the
conference agreement
was a Senate amendment by Sen. Daniel Akaka (D-HI) and supported by
the Humane Society of the U.S. (HSUS), which would have banned from
the food supply all non-ambulatory livestock, regardless of species
or cause of the animal’s “downer” status. Several
national livestock and general farm groups argued the amendment is
redundant to USDA’s BSE mitigation rules and did not consider
some natural behaviors of animals that might render them “unable
to rise or walk unassisted” upon reaching an auction market or
slaughter facility.
Also removed from the bill was another Akaka amendment,
again pushed by HSUS, that would have withheld research funding
from any institution
purchasing research animals from USDA licensed Class B animal dealers.
This amendment was removed at the urging of the National
Association for Biomedical Research and the nation’s
land grant universities which would have been the most directly affected
by the loss of Class B dealers.
A highly controversial amendment to withhold USDA funding to inspect
horses destined for slaughter was modified to allow horse slaughter
companies to apply for and receive permission to move from mandatory
(government-paid) slaughter inspection to a fee-for-service slaughter
inspection scheme. The effective date of the funding shift was delayed
120 days.
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The committee also modified House language that would
have killed a controversial “premium reduction plan” crop
insurance program opposed by major crop insurance companies and large
independent
agents. The program is controversial because companies which qualify
to sell the discounted insurance must first show a formula by which
they can achieve operational savings, to achieve the savings, that
will be passed on to farmers. Only one company has been approved, but
under a new rulemaking recently published by USDA, nine companies have
applied to offer the reduced-premium insurance. Under the conference
compromise the program will continue through the 2006 crop insurance
year, which ends in mid-2007.
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top Food & Drug Administration Among other provisions, H.R. 2744 appropriates $1,838,567,000 for
FDA, including $305.3 million from prescription drug, $40.3 million
from medical device and $11.3 million from animal drug user fees. Among
the specific increases above last year’s appropriations levels
are: $10 million each for food safety and drug safety, $884,000 for
direct-to-consumer advertising and $7.8 million for medical device
review. The conference agreement specifically provides $14.696 million
for orphan products grants, “not less than” $56.228 million
for generic drugs activities and “not less than” $4 million
for the FDA Office of Women’s Health.
Among specific instructions regarding spending, one addresses congressional
concerns regarding the work on FDA advisory committees of individuals
who may have a conflict of interest. Provisions related to this matter
were included in both the House and Senate-passed bills; the conference
report attempts to split the difference between the two versions. The
bill prohibits expenditure of funds to grant waivers to allow service
as voting members on advisory committees by individuals determined
to have a conflict of interest unless FDA posts on its web site, 15
days before an advisory committee meeting, the nature of the conflict
of interest and the agency’s rationale for granting a waiver.
If a conflict is found after this 15-day period, this must be disclosed
as soon as possible and, in every case, before the meeting. In addition,
the bill prohibits spending appropriated funds on making new appointments
to advisory committees unless FDA reports quarterly to the HHS Inspector
General and the House and Senate appropriations committees on its efforts
to identify qualified, non-conflicted individuals to serve on its advisory
committees.
Notwithstanding the inclusion of this language, Rep. Rosa DeLauro
(D-CT), the ranking member on the House Agriculture-FDA appropriations
subcommittee, termed the provision one of the bill’s failures,
stating the conference report language is weaker than what was passed
by the House and will not address serious concerns about the use of
conflicted outside advisors to help FDA make important public safety
decisions.
Controversial provisions the conference committee dropped include
a House-passed provision essentially preventing FDA from enforcing
the law against imported prescription drugs and a Senate-passed provision
prohibiting the agency from reviewing contact lens applications unless
manufacturers certified that they would sell the products to any retailer.
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Labor-HHS Spending Bill Moves to Conference
The Senate passed a $145.7 billion FY2006 Labor, HHS, Education, & Related
Agencies appropriations measure this week, sending it to conference
with the House after adding $8 billion in emergency funds to help prepare
for a potential avian flu outbreak. This is a slight increase over
FY2005 funding level of $143.463 billion and the President’s
request of $141.919 billion. The Senate has appointed conferees to
iron out differences with the House passed bill.
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House, Senate Poised to Consider Reconciliation Provisions House and Senate committees completed work on their
Budget Reconciliation packages; consolidated provisions are expected
to be brought to the
full Senate as soon as next week and the House the following week.
In both the Senate Finance and House Energy & Commerce Committees,
which reported a number of Medicaid-related changes, the provisions
passed
on partisan votes, with Democrats objecting that many of the changes
would place at risk vulnerable seniors, disabled persons, and children.
Both committees made modifications to Medicaid prescription
drug reimbursement and payment, including re-defining the calculation
of the Average Manufacturer
Price (AMP) reimbursement basis. Both bills include authorized generics
in the best price calculation and both change the Federal Upper Payment
Limit (FUL) for drugs. Both also require pharmacy dispensing fees,
with the Senate bill specifically requiring the dispensing fee for “a
noninnovator multiple source drug to be greater than [that] for an
innovator multiple source drug that is rated as therapeutically equivalent
and bioequivalent to such drug.” The House bill requires
the dispensing fee for multiple source drugs be at least $8.
In addition, the Finance Committee increased the prescription drug
rebate to 17% and expanded the rebate to some physician-administered
drugs to which rebate requirements had not applied previously.
Other Medicaid provisions attempt to reduce Medicaid
fraud and abuse by dealing with asset-transfer “loopholes” and
encouraging states to be more aggressive in implementing
false
claims act requirements.
Additional provisions reported by the Energy & Commerce Committee
would require the HHS Inspector General to study the appropriateness
of the committee’s newly defined reimbursement basis (RAMP) and
the GAO to study the appropriateness of pharmacy dispensing fees; authorize
states to increase beneficiary cost-sharing for prescription drugs
not preferred on the state’s formulary (or decrease cost-sharing
for preferred drugs) and to apply a premium for Medicaid services;
and provide for payments to states for innovation in controlling drug
costs, including increasing use of generic drugs and using risk management
programs.
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House Ag Panel Moves To Cut $3.7 Billion In FY2005 Spending; House
Plan Sets Up Major Conference Battle With Senate Reductions
House Agriculture Committee Chair Bob Goodlatte (R-VA) unveiled a
bold plan this week to cut $3.7 billion from ag spending to meet his
committee’s budget reconciliation obligations. In doing so Goodlatte
targeted programs left untouched by the Senate ag panel, while at the
same time refusing to cut farm program payments across the board as
the Senate did. The committee plan also refused to reauthorize and
extend the Milk Income Loss Contract (MILC) program which almost scuttled
Senate ag reconciliation.
The House committee set out to trim $844 million from
food stamps, a move considered politically untenable by the Senate
panel. Cuts in
commodity programs will receive a $1 billion trimming, including an
upfront whack of $513 million in commodity program costs by reducing
direct payments to farmers from 50% to 40% for crop years 2006 and
2007.
Given the House ag panel cut programs that were left
untouched in the Senate, and cut 23% more than the Senate, conference
action
will be lively.
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Contact Lens Bill Heads to White
House
On October 26, the House passed S. 172, to amend the
Food, Drug, and Cosmetic Act to require that all contact lenses be
regulated as medical
devices. The bill focuses on non-prescription contact lenses, purchased
generally for cosmetic purposes and not necessarily fitted by an eye
care professional. In discussing the need for the legislation, members
of the House and Senate have focused on cases where individuals have
purchased plano contact lenses (without visual correction) from
Internet or other retailers, without benefit of intervention by an
optometrist, ophthalmologist,
or other professional. Cases have been reported of serious eye injury
from these lenses, presenting a risk of blindness.
FDA has argued, when asked by Congress about this situation, that
such lenses are regulated as cosmetics because they make no claims
to treat, prevent, or diagnose a disease, essential components of the
definition of medical device. Without specific authority, the agency
has said, it cannot require pre-market clearance for these non-prescription
lenses. S. 172 provides this specific authority. The bill makes clear
as well that while deeming all contact lenses to be medical devices,
Congress is not otherwise extending the definition of a medical device
and that its provisions have no legal effect on any other product regulated
by FDA.
The President is expected to sign this legislation.
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Bennett Contact Lens Provision Removed in Conference
Language on the distribution of contact lenses in the Senate FY2006
Agriculture Appropriations bill was stripped out in conference with
the House this week. Senate Appropriations, agriculture subcommittee
Chair Robert Bennett (R-UT) offered the Senate-passed provision prohibiting
the agency from reviewing contact lens applications unless manufacturers
certified that they would sell the products to any retailer.
The amendment purported to codify the language of settlement agreements
that were entered into by some contact lens manufacturers several years
ago. However, the amendment would result in the improper broadening
and extending of what were limited remedial actions previously agreed
to, in a manner that would violate long-standing antitrust principles.
Further, the language did not fall under the purview of the appropriators.
The House Energy & Commerce Committee is expected to hold hearings
on this issue in winter 2006.
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National Uniformity for Food Act Introduced
On October 27, Reps. Mike Rogers (R-AL) and Ed Towns (D-NY) introduced
H.R. 4167, the National Uniformity for Food Act. This legislation,
introduced in several previous Congresses but not passed, would pre-empt
state law and regulation regarding food adulteration and warning labels,
among other things, that are not identical with FDA requirements.
Existing state requirements could stay in place for six months, with
an opportunity for states to request that FDA allow them to maintain
their requirements, for specified reasons, or that FDA expand certain
requirements across the states. If FDA determines, after reviewing
any such requests, there is no compelling public health reason to keep
current requirements in place or to extend them to other states, they
will be discontinued. In any such review, FDA also must consider whether
keeping requirements in place in individual states burdens interstate
commerce. In addition, a process is established by which states can
petition FDA to put new requirements in place for reasons of unique
health and safety circumstances.
The House bill has 163 cosponsors; a Senate version of the legislation
is expected to be introduced shortly.
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Animal Rights Extremist Tells Senate Murder “Morally Justified” to
Stop Animal Use; Inhofe Drops Bill to Protect Labs, Ag Facilities
Senators on both sides of the aisle were stunned this week when a
leading animal rightist, who is also a California surgeon, testified
at a Senate Environment & Public Works Committee hearing that murder
of biomedical researchers was “morally justified” to end
animal experimentation.
In a hearing Oct. 26 on animal rights violence, Sen. James Inhofe
(R-OK), chair of the Senate Committee on Environment & Public Works
also announced he was introducing a bill to amend the federal criminal
code to provide greater federal protections to labs, farms, ranches,
food companies and animal exhibitions.
Jerry Vlasak, spokesperson for the North American Animal Liberation
Front Press Office (ALF) and a principal in Stop Huntingdon Animal
Cruelty (SHAC), a group which has targeted the contract research firm
Huntingdon Life Sciences (HLS), told the committee he stands by past
statements averring the moral justification of taking human lives to
save animal lives. Sen. Frank Lautenberg (D, NJ) told Vlasak his statements
were “revolting.”
Following the hearing, Inhofe introduced S. 1926, a bill that would
amend the Animal Enterprise Protection Act section of the federal criminal
code to impose stricter penalties and a greater number of causes of
action. The bill would also, for the first time, criminalize “tertiary
targeting” – the practice by animal rights groups of harassing
and intimidating companies which do business with a target firm, or
terrorizing neighbors, friends or colleagues of targeted individuals.
The bill would protect farms, ranches, laboratories, ag enterprises,
exhibitions, zoos and similar animal enterprises. The bill is a series
of amendments to a section of the criminal code first enacted in 1993
when a group of ag and biomedical research groups lobbied for the federal
protections.
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BSE UPDATE
Chambliss Says Japan Won’t Take U.S. Beef for Four Months, Introduces
Bill to Require White House to Impose Sanctions
Sen. Saxby Chambliss (R-GA), chair of the Senate Agriculture Committee,
was joined this week by Sens. Pat Roberts (R-KS) and Kent Conrad (D-ND)
in introducing a bill that would require President Bush to impose trade
sanctions on Japan if that country does not reopen its market to U.S.
beef. At a press conference to announce introduction of the bill, Chambliss
released a letter he had received from the Japanese ambassador to the
U.S. in which the ambassador laid out the steps his government must
go through to reopen its market to U.S. beef. Chambliss said the letter
makes it clear it will be at least four months before the market might
reopen, given the Japanese Food Safety Commission intends to finalize
a recommendation on beef trade and then give the public four weeks
to comment.
In a related development, the Japanese prime minister said this week
that a visit in November by President Bush to Tokyo does not mean the
Japanese government will reopen its markets before Bush arrives.
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Most Japanese Would Boycott U.S. Beef: Newspaper Poll
Nearly 70% of Japanese consumers oppose lifting Japan’s two-year
ban on U.S. beef imports, according to a poll published in the Japanese
newspaper Asahi Shimbun. According to the poll, 67% opposed lifting
the ban, up from 64% in a similar poll taken in 2004. More than 21%
said they’d buy U.S. beef when the ban is lifted, down from 26%
in the 2004 poll.
Return to top U.S. Awaiting EU Counteroffer on Doha Ag Issues
The European Union (EU) announced Europe would cut its average agricultural
tariffs to 12 percent from 23 percent, a reduction of 46 percent. This
was a counteroffer to the U.S. bid to cuts its trade distorting subsidies
by 60%. However, the EU is not in agreement over this cut, with a clash
expected between EU trade commissioner Peter Mandelson and a group
of farm-reliant countries led by France.
According to the EU, the offer proposes a reduction in the number
of sensitive products designated by the EU, reductions in tariffs
even for sensitive products - and wider Tariff Rate Quotas (TRQs)
for all sensitive products, a 70% reduction in trade distorting agricultural
subsidies.
The previous EU offer only cuts its subsidies by 25% and placed too
many commodities on its “special products” list where high
tariffs would be permitted.
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New Bills
A number of new bills have been introduced. Click
here to send a request for a copy of the text or more information about
the bill.
S.1915
Sen. John Ensign (R-NV) introduced legislation to amend the Horse Protection
Act to prohibit the shipping, transporting, moving, delivering, receiving,
possessing, purchasing, selling, or donation of horses and other
equines to be slaughtered for human consumption.
S.1920
Sen. Barack Obama (D-IL) offered a bill to establish a renewable diesel
standard.
S.1922
Legislation proposed by Sen. Kent Conrad (D-ND) would authorize action
if negotiations with Japan to allow the resumption of U.S. beef exports
are not successful.
S.1926
Sen. James Inhofe (R-OK) introduced a bill to provide the Department
of Justice the necessary authority to apprehend, prosecute, and convict
individuals committing animal enterprise terror.
H.R.4142
Rep. Tim Murphy (R-PA) offered language to provide health information
technology grants to States and transform the Medicaid Program by
reducing the number of medical and medication errors, unnecessary
hospitalizations, infections and inappropriate care that exists within
the current system.
H.R.4151
A bill introduced by Rep. Ron Lewis (R-KY) would provide for the tax
treatment of horses.
H.R.4167
Rep. Mike Rogers (R-MI) proposed legislation to provide for uniform
food safety warning notification requirements.
H.R.4157
Rep. Nancy Johnson (R-CT) introduced a bill to encourage the dissemination,
security, confidentiality and usefulness of health information technology.
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Inside
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